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SEC Charges Ex-First Solar IR Exec With Violating Reg FD

Written by: Antoine Gara09/06/13 - 3:27 PM EDT

Tickers in this article:
FSLR

NEW YORK ( TheStreet) -- The Securities and Exchange Commission on Friday charged Lawrence D. Polizzotto, a former First Solar investor relations executive, with violating Regulation FD for disclosing non-public details about the status of a key government loan to a select group of analysts and investors.

Polizzotto indicated in phone conversations with some analysts in and investors in September 2011 that First Solar was unlikely to receive a much-anticipated loan guarantee from the U.S. Department of Energy for one of its largest solar projects, in violation of fair disclosure requirements, the SEC said.

He agreed to pay $50,000 to settle the SEC's charges, without admitting or denying the findings. The SEC said did not bring an enforcement action against First Solar because of "the company's extraordinary cooperation with the investigation among several other factors."

The disclosure of non-public information was first reported by TheStreet on September 21, 2011, in an article by Eric Rosenbaum, who confirmed with analysts covering First Solar's stock that the company had told them it would not seek a $1.9 billion federal loan for is its 550 megawwatt Topaz project, one of the largest solar projects ever to be constructed.

The revelation to some that the company would not receive a loan guarantee from the Department of Energy caused First Solar shares to slip about 7% on Sept., 21.

The company's shares fell another 6% the following day, after it confirmed through a press release that the Topaz project would not receive a government loan guarantee.

The SEC's allegations on Friday indicate that Polizzotto did cross a line in disclosing material information to a handful of analysts and investors, but not the wider public.

"Polizzotto offered previously undisclosed information to select analysts and institutional investors and left the rest of First Solar's investors in the dark," Michele Wein Layne, Director of the SEC's Los Angeles Office, said in a statement. "All investors, regardless of their size or relationship with the company, are entitled to the same information at the same time."

According to the SEC's order, Polizzotto violated Regulation FD during one-on-one phone conversations with approximately 20 sell-side analysts and institutional investors.

The SEC said that when First Solar discovered Polizzotto's selective disclosure, it promptly issued a press release before the market's open on Sept., 22. First Solar then quickly self-reported the misconduct to the SEC and undertook remedial measures such as additional Regulation FD training for employees responsible for public disclosure.

"First Solar remains rigorously committed to compliance with SEC regulations," the company said in an e-mailed statement on Friday.